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Don’t limit data centre sops to location-based criteria

IT industry lobby group Nasscom has urged the government to not restrict data centre fiscal incentives to investments made only in the proposed ‘Data Centre Economic Zones’.

It also said the incentives must not be tied to any other location-based criteria.

The Ministry of Electronics and IT (MeitY) last month released a draft Data Centre Policy and invited comments from the industry and public on the same.

According to the policy, “A Data Centre Incentivization Scheme (DCIS) will be formulated by Government of India which would specify the intended beneficiaries, applicability criteria and fiscal and non-fiscal incentives for the sector.”

Nasscom said while incentives would make such services globally competitive, the policy lacked clarity on what the applicability criteria would be for such incentives.

Sunil Gupta, cofounder and CEO of data centre infrastructure company Yotta Infrastructure said the proposed incentives should be linked to the adoption of certain standards proposed by the government.
He said the government should mandate certain minimum standards instead of leaving it to the operators to define their own standards.

“This will allow adoption of transparent practices in terms of design, commissioning, and operations of data centres and hence, create a very high benchmark for the Indian data centre industry,” Gupta said.

The fiscal incentives should be linked to the adoption of standards and highest performance including the lowest PUE (power usage effectiveness), highest quality standards, scalability, and adoption of green energy, he added.

The industry body, however, said there should be a broad range of standards for data centres to choose from based on customer requirements and asked the government to “avoid mandating a few selected standards.”

Nasscom also urged MeitY to work with the Department of Telecom (DOT) to enable policies that would provide new optic fibre cable entrants (non-carriers) or third parties, access to public rights of way in municipalities and rural areas.

Typically, internet and data business firms have to engage with municipalities to get access to laying optic fibre cables under public areas like roads and footpaths.

Gupta also said there was a need for new players, including data centre operators, in the fibre deployment business, adding that “they should get ‘rights of way’ with minimum fuss.”

Piyush Somani, Founder, MD and CEO, ESDS Software Solution welcomed the idea of more renewable energy usage by data centres but said that companies should be allowed to buy from renewable energy firms at generation cost. “Home-grown companies like us should be allowed to buy renewable power at generation cost and nominal transportation charges from Discomm or Transcomm’s. This will boost more renewable power projects in India and distribution/transmission charges can be reduced.”

Nasscom also asked the government to consult the industry players before finalising on a ‘testing and certification’ framework for data centres and suggested that global standards be employed to the testing framework rather than separate domestic standards. TechFinGuy

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